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MANILA GOLF v. IAC

FACTS:

Several proceedings were initiated by or on behalf of private respondent Fermin Llamar and his fellow caddies. One of the proceedings was filed with the Social Security Commission (SSC) by the caddies, alleging that they were employees of the Manila Golf and Country Club but were not registered as such with the Social Security System (SSS). Another proceeding was a certification election case filed by the Philippine Technical, Clerical, Commercial Employees Association (PTCCEA) on behalf of the caddies. There was also a compulsory arbitration case initiated by the PTCCEA. The Manila Golf and Country Club argued that the caddies were not their employees, as they were allowed to render services to individual members and guests who paid for these services. Some of the petitioners withdrew their claims for social security coverage, and the case continued only as regards Fermin Llamar and Raymundo Jomok. The SSC dismissed the petition, ruling that there was no employer-employee relationship between the caddies and the Club. Fermin Llamar appealed to the Intermediate Appellate Court, which declared Llamar an employee of the Club based on the "control test" established in a previous Supreme Court ruling.

ISSUES:

  1. Whether there is an employer-employee relationship between the Club and Fermin Llamar.

  2. Whether the principle of res judicata applies to the various proceedings involving the same issue of employer-employee relationship.

  3. Whether or not there exists an employer-employee relationship between the petitioner and the private respondent.

  4. Whether or not the private respondent should be reported for compulsory coverage to the Social Security System.

RULING:

  1. The Court ruled in favor of the existence of an employer-employee relationship between the Club and Fermin Llamar based on the control test. The Club, through its rules and regulations and control over the caddies' conduct and work, has the right to control not only the results of the work but also the means and methods by which it is accomplished.

  2. The Court held that the principle of res judicata does not apply to the certification case, which is a non-adversarial, fact-finding proceeding and does not foreclose further disputes between the parties regarding the existence or non-existence of an employer-employee relationship.

  3. The Supreme Court declared that there is no employer-employee relationship between the petitioner and the private respondent. It was held that the facts of the case do not necessarily or logically point to such a relationship to the exclusion of any other form of arrangements. The Court emphasized that the caddies, including the private respondent, have sufficient freedom and flexibility in the manner they carry out their services. They are not required to observe working hours, can leave or stay away as they please, and cannot be disciplined by the petitioner beyond being barred from the premises. These considerations are inconsistent with the concept of employment.

  4. The Supreme Court declared that the petitioner is under no obligation to report the private respondent for compulsory coverage to the Social Security System.

PRINCIPLES:

  • The control test is used to determine the existence of an employer-employee relationship. It requires that the employer controls or has reserved the right to control the employee not only as to the result of the work but also as to the means and methods by which it is accomplished.

  • For res judicata to apply, the following requisites must concur: (1) there must be a final judgment or order; (2) said judgment or order must be on the merits; (3) the court rendering the same must have jurisdiction over the subject matter and the parties; and (4) there must be identity of parties, subject matter, and cause of action between the two cases. Adversarial proceedings are necessary for res judicata to apply.

  • The determination of an employer-employee relationship depends on the existence of control by the alleged employer over the alleged employee. Freedom and flexibility in carrying out services, absence of discipline beyond barring from premises, and lack of compulsion to render a definite number of working hours are inconsistent with an employment relationship.

  • The mere fact that fees payable by clients are suggested by the petitioner does not establish an employer-employee relationship. It does not demonstrate the level of control over the caddies' work and compensation that an employer would possess.